Business Information Systems - Report Example

The Fine Food Company: Presenting a Case for Business Information Systems Introduction In response to a directive from the Chief Executive Officer, Iam pleased to present a case for implementation of a suitable state-of-the-art integrated Business Information System (BIS) for the Fine Food Company (FFC). This report has been prepared after a review and analysis of the existing operating and management information sharing procedures in vogue in the company in light of the recent advancements in Information and Communication Technology (ICT) applications in business enterprises worldwide. About FFC The Fine Food Company (FFC), headquartered in Ashville, is a well established and growing company engaged in the production and supply of food items. The company has a wide clientele that ranges from large supermarket chains to small health food shops. Organised under four main divisions, – manufacturing, warehousing and distribution, sales and marketing, and finance – FFC caters to ‘advance orders’ booked a week in advance as well as ‘priority orders’ that are immediately delivered. Apart from processing, cooking, and preparing food at its manufacturing site close to headquarters, the company also out sources pre-prepared and partly prepared food products from other vendor firms, and markets them after packaging. The annual turnover of FFC stands at an impressive UKP15 million, with a steady net profit of about 7%. Currently on an ambitious five-year plan to augment the annual growth rate to 10% discounting inflation, and net profit to 9%, FFC will take advantage of the growing demand for fashionable and quality food products. The company has been traditionally operating on a solely paper-based transaction processing, accounting, and reporting mode that is obsolete and incompatible with the information age, besides being cumbersome, time-consuming, and inefficient. Business Information Systems As Allen and Gilmore (2004, p.180) rightly observed, the “factory of the future” that succeeds in the new millennium would be “organized around the computer.” And that future is right here and now. The power of the ubiquitous computer or laptop and the immense scope of the World Wide Web and Internet technology hold great potential to “integrate the various processes involved in the manufacture of a product or delivery of a service.” (2004). Towards the closing decades of the 20th century, computer technology was largely used for MIS (management information systems) applications, mostly on a stand-alone mode. The advent of network technology and Internet has now transformed the scope of computer applications as never before. Today business executives and managers have greater and easier access to larger data on wider networks. The benefits of MIS have now been expanded to include basic “transaction processing systems” (Allen and Gilmore, 2004, p.181) that lie at the heart of efficient operations in a successful organisation. They are better known as business information systems (BIS). Such systems are capable of efficiently and quickly handling a wide range of daily transactions in a company. The include order booking, inventory management, invoicing, shipping, payroll management, and accounting. The advances in information processing through Web-enabled distributed data networks have made global online transactions possible on a real-time basis. As Pottruck and Pierce aptly observed, the Web “makes information available to everyone, and is therefore, the single most important tool for collaboration that has ever been invented… Organisations that are aligned behind common purpose will find it a powerful tool.” (2001, p. 34). BIS for FFC: A Needs Analysis An organisation that does not quickly get into the bandwagon of technological changes for innovation is certain to be left far behind in the highly competitive business environment worldwide. The systems of operations at FFC are conventional, cumbersome, and greatly time-consuming, all of which adversely impact cost management efforts for achieving better profit margins. Order booking, inventory controls, invoicing, accounting, and all common operations are still performed manually by the staff, which is heavily dependent upon paper-based transactions. All information recording and internal communication is paper based and relies on a range of pre-printed documents, which are then used as appropriate. A great amount of time, effort, stationery, and costs are involved in paper-based transaction processing that FFC still relies upon in conducting business operations. On the other hand, several off-the-shelf computer-based applications or customised packages available from several vendors can be employed in the company to benefit from the IT revolution that has been making waves across the globe. The first and foremost need in this context is to computerise all business operations at the company by installing a networked and Internet-enabled computer system that links all departments. BIS Unit The Business Information Systems Unit, headed by the Manager (BIS), would consist of the following components: The Networking hardware, complete with one server, routers, and OFC connections Desktop PCs with standard features for all departments (on need basis, to be decided in consultation with the department managers and Directors concerned). A suitable operating system (OS) such as Windows XP across all systems for compatibility and economies of scale LAN connections for individual desktop computers (to be estimated on receiving reports from all Directors Internet Cable Connections from a reputed ISP (internet service provider): Broadband is recommended since dial-up connections are cumbersome, slow, and passé. Suitable group sharing anti-virus package (McAfee or Norton Symantec recommended) and standard firewall systems. A laptop computer for the CEO, with GSM or GPRS/Wi-Fi connectivity. A block diagram that illustrates the computerisation scheme and the data flow between departments is shown below: I propose that a final decision on the total configuration be arrived at after examining the recommendations received from the department heads. The overall cost implications need to be worked out, and the break-even estimated accordingly. Although the project implementation may appear to be highly capital intensive at start, the returns through cost savings on manual operations, services and stationery, apart from expanded business on account of faster turnover would more than break-even within a five-year horizon, if not earlier. The recurring costs on account of maintenance and upgrades would be minimal. The Applications On procuring and installing the hardware components, the following application packages will be made available through direct purchase of application software such as MS Office for word processing, worksheets, presentations, database management, and accounting software such as Tally or Oracle. At the same time, the need for customised applications for accessibility across all departments will be developed through suitable programming by the ISU staff programmers. These would include the following: Sales & Marketing Applications: All order booking will be computerised through suitable templates to be developed. As soon as an order is received, the salesperson will enter the details directly on the system. This is saved on the common database that is accessed regularly by the Warehousing and Distribution (W&D) staff. Separate templates for “Priority” delivery and “Advance” delivery will be developed. The consignment note and invoice that are now prepared manually will be automatically generated through a suitable programme that converts the order into a consignment format and also creates an invoice. All that W&D staff has to do is to print out the consignment note and invoice and to send it out with the delivery van. In case of corrections, these are updated in the networked system on real time basis. Manufacturing & Operations: As and when orders are received by the Sales Department and registered online, a matching order book list is also generated for view by the Manufacturing and Operations as also by the W&D department. This will facilitate work scheduling by these departments without the need for manual paper-based work. Recipe cards can also be made accessible online through development of a suitable query-based database. Finance Applications: On the one hand, payrolls and accounting management can be easily handled, with less staff by inducting ready application packages. On the other hand, the process of handling accounts payable and accounts receivable will also be computerised through suitable programming. All accounting ledgers now manually handled by Account handlers, as well as weekly returns will be computerised and made online for access on a password-based system to ensure security. Daily, monthly and yearly returns and analysis sheets can also be generated through suitable programming. Budgeting applications such as forecasting, allocation, controls and monitoring, including preparation of financial statements can be done on computers expeditiously, and online sharing on authorisation basis would also be possible. Company Web site Getting the company’s own Web site up and running is a major priority. This would not only provide a window of exposure and online advertising to the clientele and the world at large, but also enable online business transaction processing through placing of online orders, accepting payments through online pay mechanisms such as Pay pal, Western Union, e-gold, etc. Market surveys for business expansion would also become possible with online access. Personnel Functions Staff functions such as recruitment, training, career development, attendance, performance appraisal, and other HR chores can be computerised for better effectiveness and efficiency. Conclusion As described above, it can be seen that the benefits of computerisation and adoption of a suitable ICT platform for FFC is a key strategy that needs to be implemented on priority to give a modern facelift to our company and to gain a competitive edge in the marketplace through innovative business solutions and improved profit margins. I therefore commend the BIS scheme as outlined above for approval of the Board of Directors and for allocation of initial funds to go ahead with speedy implementation. References Allen, W.R. & Gilmore, H.L. (2004). Managing in tomorrow’s environment. What Managers Do. American Management Association (e.approach). Pottruck, D.S. & Pearce, T. (2001). Passion driven growth in an Internet driven world. San Francisco: Jossey-Bass. * * * * Read More